Doing business in the Czech Republic

Czech company law is codified, mainly in the Civil Code and the Business Corporations Act, and companies come into existence on entry in the Commercial Register kept by regional registry courts, with notaries playing a central role in formation. Business activities are authorised through trade licences issued by trade licensing offices. Tax is administered by the Financial Administration; merger control sits with the Office for the Protection of Competition (ÚOHS), data protection with the Office for Personal Data Protection and industrial property with the Industrial Property Office. As an EU member state the Czech Republic applies EU rules on customs, free movement of capital, data protection and cross-border enforcement of judgments, and keeps its own currency, the Czech koruna.

Key facts

Corporate income tax

21% (from 2024)

VAT

21% standard; 12% reduced

Main entity form

S.r.o., minimum CZK 1 per shareholder

Foreign ownership

Foreign entities do business on the same terms as Czech entrepreneurs

Capital flows

Czech koruna; EU free movement of capital applies

Data protection

GDPR, including 72-hour breach notification

New York Convention

In force from 1 January 1993 (reciprocity declarations)

Minimum wage 2026

CZK 22,400 per month

Foreign investors usually form an s.r.o. or a joint stock company by notarial deed, or register a branch. A company exists only once entered in the Commercial Register, and beneficial owners must be registered promptly.

Key facts

• An s.r.o. needs only CZK 1 of capital per shareholder; a joint stock company needs CZK 2,000,000, 30% paid before filing.

• Founding documents must be a notarial deed by a Czech notary, so foreign shareholders should plan for powers of attorney and legalised documents.

• The company exists from registration in the Commercial Register, and the application must be filed within six months of incorporation.

• A branch is not a Czech legal entity and needs a director entered in the Commercial Register.

• Beneficial owners must be registered without undue delay; an unregistered company cannot distribute profits.

Who handles this in the Czech RepublicSetting up and running a companyContracts and commercial law

Corporate income tax is 21% from 2024 and VAT is 21% with a single 12% reduced rate. Withholding tax is generally 15% but 35% for payments to non-cooperative non-EU jurisdictions, and Pillar Two applies to large groups.

Key facts

• Corporate income tax is 21% for periods starting in 2024 onwards.

• Dividends, interest and royalties to non-residents bear 15% withholding, or 35% where the recipient is outside the EU/EEA in a country without a treaty or information exchange agreement.

• VAT is 21%, with 12% for groceries, medicines and accommodation; registration is triggered at CZK 2 million turnover.

• Pillar Two rules, including a 15% domestic top-up tax, apply from 31 December 2023.

• The bank and energy windfall tax surcharge covered 2023 to 2025.

Who handles this in the Czech RepublicTax and structuringAccounting and annual filings

The 2026 minimum wage is CZK 22,400 a month and employer social security and health insurance add 33.8% to gross pay. Labour Code basics and work permits for non-EU staff were not confirmed in this review.

Key facts

• From 1 January 2026 the minimum wage is CZK 22,400 a month or CZK 134.40 an hour.

• Employers pay 24.8% social security and 9% health insurance on gross pay, with only social security capped, so employer cost is roughly a third above gross pay.

Who handles this in the Czech RepublicEmployment, payroll and immigration

Foreign entities may do business on the same terms as Czech entrepreneurs, but activities need a trade licence or, for some activities, a concession. The trade licensing office can also handle initial tax registration.

Key facts

• Foreign entities trade on the same terms as Czech entrepreneurs.

• Companies and branches need a trade licence or other authorisation for each activity, and some activities need a concession, which takes longer.

• One application at the trade licensing office can cover tax office registration for most taxes.

Who handles this in the Czech RepublicLicences, permits and regulators

As an EU member state the Czech Republic may not restrict capital movements or payments, subject to Treaty exceptions, while keeping its own currency. Central bank rules and onboarding practice were not confirmed in this review.

Key facts

• EU law prohibits restrictions on capital movements and payments, including with non-EU countries, which limits the scope for exchange controls on profit repatriation.

Who handles this in the Czech RepublicBanking and capitalPayments and currency

The Czech Republic is part of the EU customs union and applies the Union Customs Code and EU export control rules. National customs procedures were not reviewed.

Key facts

• Customs rules come from the Union Customs Code and apply uniformly across the EU.

• Exports of listed dual-use items need an authorisation under EU Regulation 2021/821.

Who handles this in the Czech RepublicCustoms, trade and export controls

The GDPR applies directly in the Czech Republic. The national implementing act, the Office for Personal Data Protection and national cybersecurity law could not yet be confirmed from official sources in this review.

Key facts

• Personal data breaches should be notified to the supervisory authority where feasible within 72 hours.

Who handles this in the Czech RepublicData protection and cyber

Trademarks, patents and copyright are governed by separate national acts administered in part by the Industrial Property Office. The Czech Republic is in the Madrid and PCT systems and EU trade marks also cover it.

Key facts

• National trademarks fall under Act No. 441/2003 and patents under Act No. 527/1990; copyright arises under Act No. 121/2000.

• International filings can designate the Czech Republic under the Madrid Protocol (since 1996) and the PCT (since 1993).

• An EU trade mark covers the Czech Republic and all other EU states with one application.

Who handles this in the Czech RepublicTrade marks, patents and brands

Deals meeting the CZK 1.5 billion and CZK 250 million turnover tests need ÚOHS clearance before closing, with fines for gun-jumping. An amendment to raise the thresholds was being prepared in September 2026 but was not in force.

Key facts

• Notification is required where combined Czech turnover exceeds CZK 1.5 billion with two parties above CZK 250 million each, or where the target has Czech turnover above CZK 1.5 billion and another party exceeds CZK 1.5 billion worldwide.

• Control must not pass before clearance is final; early implementation can cost up to 10% of turnover.

• Phase I takes 30 days (20 in simplified cases), with up to five months if proceedings continue.

• The EU FDI Screening Regulation allows national screening of foreign investment on security or public order grounds.

Who handles this in the Czech RepublicBuying, selling and investingLicences, permits and regulators

Beneficial ownership non-compliance can be fined up to CZK 500,000. Anti-bribery, whistle-blowing and sanctions rules were not confirmed in this review.

Key facts

• Beneficial ownership failures can attract fines of up to CZK 500,000, in addition to the bar on profit distribution.

Who handles this in the Czech RepublicAnti-bribery, sanctions and compliance

The Czech Republic applies the New York Convention with reciprocity declarations. Judgments from other EU states are enforced without exequatur, and the HCCH 2019 Judgments Convention applies through the EU; the country is not party to the Singapore Convention on Mediation.

Key facts

• Foreign arbitral awards are enforceable under the New York Convention, subject to the Czech reciprocity declarations.

• EU judgments in civil and commercial matters are recognised and enforced without a declaration of enforceability.

• Judgments from other HCCH 2019 Convention parties can be recognised since 1 September 2023.

• Mediated settlements cannot rely on the Singapore Convention, so their enforcement relies on national law.

Who handles this in the Czech RepublicDisputes and arbitrationContracts and commercial law